Stock market of Kazakhstan will develop at the expense of the new bonds issue

/IRBIS, Nov.04, 99/ - According to REUTERS, which cites Azamat Dzholdasbekov, the head of the National Securities Commission (NSC), development of the stock market of Kazakhstan will proceed mainly at the expense of the bonds issue. "We expect, that hereinafter the development of a stock market will proceed mainly through the municipal and corporate bonds", - has told Dzholdasbekov at the today's press-conference. From the beginning of 1999 nine bonds issues were registered in Kazakhstan. They include the first issue of municipal bonds of Mangystau oblast, and also the $30 million bonds issue of KAZKOMMERCEBANK, the largest private bank of Kazakhstan. According to Dzholdasbekov, NSC tries to increase the bonds' investors appeal. In the first quarter of 2000 Parliament have to accept some additions to the legislation facilitating non -state bonds taxation. Also some amendments in the legislation concerning toughening of the emitters' payment discipline and increase of their activity transparency are prepared. According to Dzholdasbekov, there will be no essential changes in the other segments of the market, excepting only possible selling of state blocks of shares of elite enterprises within the "blue chips" program. The matter in hand is possible sale of the parts of state blocks of oil and gas companies as Aktobemunajgaz and Mangistaumunaigas, of the Ust'-Kamenogorsk titanium- magnesium plant, of the zinc producer Kazzink and of KAZAKMYS copper corporation. Now the Government of Kazakhstan conducts a tender for election of blue chips placement advisor. According to Dzholdasbekov, a tender conclusion can be expected on December 10, 99. Characterizing a general condition of the capital market the head of NSC has informed, that total volume of trades in non-state securities has decreased in the third quarter to 338.9 million tenges compared to 724.2 million in the second quarter and 432.5 million in the first quarter of the present year. Total volume for 9 months has made 1.5 billion tenges. At the end of September the non-state securities capitalization of the Kazakhstan Stock Exchange has made 146.115 billion tenges versus 157.768 billion tenges on January 1, 1999. Number of the brokers and dealers has reduced in nine months of 1999 by 17.8%. The main reason of closing of 13 brokerage firm, the majority from which were created under the "blue chips" program, is their inability to work in the circumstances of low liquidity of the secondary market. Under the NSC forecast, in the first three months of 2000, most likely, there will be a gradual reduction in the number of joint-stock companies. Now there are 2,200 JSC in Kazakhstan. Process of reduction in the number of brokers and dealers will proceed mainly at the expense of registrars and nonbank organizations having not right to handle a client accounts. The number of the banks-custodians will be gradually increased due to increase of number of foreign banks. Dzholdasbekov has told, that in the beginning of 2000 it is possible to expect appearance of one or two Investment Funds after Parliament will liberalize the order of the Funds creation. A role of the Non-state Accumulative Pension Funds will increase. Their assets already now exceed the population deposits in the banks and make $400 million, and will grow in the following year. "The main ours theoretical statement - the equity market develops when the investors appeal on it, plus it is necessary a normal condition of real economy, because securities are needful to those emitters, which have the line of the profitable business", - Dzholdasbekov said.